FY2023 Budget At-a-Glance

Debt Service Fund Highlights

A reduction in the debt service levy means Iowa City spends less on interest payments and more on providing services to the community. Communities who adhere to responsible debt policy and have limited debt are attractive to ratings agencies like Moody’s. A good bond rating, like Iowa City’s Aaa rating, makes it easier to borrow at lower rates of interest, ultimately saving thousands or millions of taxpayer dollars over the life of a bond. At the end of FY2023, the City’s outstanding debt is projected to be $65 million. This equates to 0.90% of total valuations, well below the State of Iowa threshold. ► The State of Iowa gives cities the authority to establish a debt service fund and levy taxes to pay for principal and interest on general obligation bonds issued by their city. ► Iowa City’s debt service levy remains unchanged from the prior fiscal year.

► Total outstanding debt is trending downward - FY2023 anticipates a decrease of $1.4 million from FY2021 in total outstanding debt by year end. ► Future general obligation bond issues, including 2% for bond issuance costs, are estimated at $10.3 million for both FY2023 and FY2024.

General Bonded Debt Outstanding and Percent of Total Valuation

$80.00

1.60%

$70.00

1.40%

$60.00

1.20%

$50.00

1.00%

$40.00

0.80%

$30.00

0.60%

Millions of Dollars ($)

$20.00

0.40%

$10.00

0.20%

FY13 FY14 FY15 FY16 FY17 FY18 FY19 FY20 FY21 *FY22 *FY23 *FY24 GO Bonds Outstanding $61.21 $67.08 $62.00 $57.88 $66.85 $66.95 $67.40 $68.2 $66.7 $65.8 $65.3 $67.1 Percent of Total Valuation 1.33% 1.44% 1.28% 1.17% 1.25% 1.22% 1.14% 1.11% 0.97% 0.94% 0.90% 0.91% 0.00% $-

*Budgeted and projected amounts

5